On July 1, 2009, Cravath issued to its clients a memo entitled “SEC Approves Amendment to NYSE Rule 452, Eliminating Broker Discretionary Voting in Uncontested Director Elections.” As a result of this amendment, uncontested director elections held on or after January 1, 2010 are considered “non-routine” for all U.S. public companies other than those registered under the Investment Company Act of 1940. Accordingly, brokers are prohibited from voting on these matters without specific instructions from beneficial owners. The amended Rule applies to all voting by brokers that are members of the NYSE and is not limited to companies listed on the NYSE. The memo discusses the impact of this amendment on companies and institutional shareholders.
Please click here to read the memo.